HMRC ‘sends letters to millions’ with new August 2026 deadline | Personal Finance | Finance
HMRC has written to many (Image: coldsnowstorm via Getty Images)
More than 580,000 workers who ought to have enrolled in HMRC’s Making Tax Digital (MTD) for Income Tax had neglected to do so, according to findings from a Freedom of Information (FOI) request submitted by international accountancy and business advisory group Azets. HMRC figures revealed that 864,000 individuals and landlords should have registered for MTD for Income Tax by April 6 this year, yet as of May 20 only 282,637 had complied, HMRC confirmed in response to the request.
In a new statement this week, HMRC indicated it anticipated further registrations ahead of the August 7 deadline. Making Tax Digital represents a new approach to self-assessment tax returns, requiring four quarterly submissions rather than a single annual one. The scheme is being introduced incrementally over the coming years.
However, one specialist has cautioned that vast numbers remain wholly unprepared. Fraser Campbell serves as UK head of accounts and business advisory services at Azets.
He said: “MTD for Income Tax represents the most significant change in the personal tax system in nearly 30 years – but two-thirds of those who should be registered aren’t. There are a multitude of reasons why people may not have signed up – they may not be aware of the changes, they may have simply forgotten about it or they may be in denial that they need to register.
“Whatever their reason, not signing up creates potential problems in the future. HMRC has said there are no penalties for missing a quarterly return date for this year, but people are setting themselves up for stress, trouble and, potentially, fines by not taking action to register and keep up to date with the quarterly filings now.
Fraser Campbell is Azets UK head of accounts and business advisory (ABAS) at Accounts & Business Advisory Services (Image: Azets/Deep South Media)
“HMRC requires an end-of-tax-year declaration, which requires the data from the four quarters to be aggregated. By not registering now and by delaying it further, anyone who is in scope of MTD will need to catch up with this year’s four filings at the same time as next year’s quarterly filings become due, as well as their annual declaration, so they’ll have to potentially file nine returns over the same 12-month period.”
On May 20, 2026, Azets lodged the following FOI request: “I am writing to request information under the Freedom of Information Act 2000 regarding the number of individuals who have signed up for Making Tax Digital (MTD) for Income Tax. Specifically, I would like to know how many of the eligible individuals have signed up for MTD for Income Tax as of today’s date, May 20.”
On June 19, 2026, HMRC responded: “As of May 20, 2026, 314,042 users had signed up to Making Tax Digital (MTD) for Income Tax. We estimate that 90% of these customers are part of the mandated cohort for 2026 (those with qualifying income over £50,000). This means that as of May 20, 2026, approximately 282,637 customers who are required to sign up during the 2026-27 tax year had done so.”
Approached for a further update this week, an HMRC spokesperson said: “Thousands of customers are signing up for Making Tax Digital every week, in line with our expectations, and we expect further increases ahead of the August 7 deadline. We’ve written to millions of customers and delivered hundreds of events and webinars. We encourage all those required to join MTD this year to take that first step and sign up now.”
How Making Tax Digital works
The rollout of MTD this April brought the personal tax system considerably closer to real-time reporting and is projected to impact 2.9m people by 2028. It established quarterly digital record-keeping and reporting requirements for hundreds of thousands of landlords, sole traders and the self-employed, who previously needed only to file a single tax return annually.
Since its implementation, eligible individuals and businesses have been obliged to maintain digital records, utilise MTD-compatible software and submit quarterly updates, alongside a final declaration. This final declaration supersedes the existing self-assessment tax return and can exclusively be filed using MTD-compatible software. Taxpayers will no longer be permitted to file through HMRC’s self-assessment portal.
Fraser said: “Anyone who is eligible for MTD for Income Tax should register for it now. Doing so will mean they will have to change their processes and use software that is MTD compliant, but there are advantages too, as people will have access to near real-time digital information about their business performance and projected tax bills for the first time. This will mean they will have accurate financial information that they can discuss with their tax adviser, which should make forward tax planning and forecasting and the year-end process a lot smoother.”
Who needs to register for Making Tax Digital
Azets’ tips for landlords, sole traders and the self-employed for the new MTD regime include:
- Check now to see if you fall under the new reporting obligations.
- Those with gross income above £50,000 per year must comply; the threshold will drop in subsequent years, so start preparations if you are likely to qualify for MTD in 2027, when the threshold drops to £30,000, or 2028, when the threshold drops to £20,000.
- Ensure that your – or your accountant’s – software is HMRC-approved so it is compatible with MTD.
- Start using MTD-compliant software now.
- Check whether you’re exempt – you might be, so check on the HMRC website or seek expert advice.
Fraser said: “Preparation, planning and taking advice at the right time are key for compliance and staying on top of the UK’s ever-evolving tax landscape. Anyone with queries or concerns about MTD should speak to an advisor now to understand whether they’re eligible and what they need to do to comply.”
